Ghana cuts key rate to lowest since 2015

Accra - Ghana’s central bank reduced its key interest rate for a third straight meeting as consumer prices rose at the slowest rate in four years and the currency strengthened.

The Bank of Ghana cut the rate to 21% from 22.5%, Governor Ernest Addison told reporters on Monday in Accra, the capital. That’s the lowest rate since February 2015. The median of nine economists’ estimates was for a cut to 21.5%.

The central bank of West Africa’s biggest economy after Nigeria’s has cut the benchmark rate after inflation slowed from a record high in March last year and the currency recovers from an all-time low. The government has vowed to boost growth from last year, when the economy expanded at its slowest rate in more than a quarter of a century.

Consumer-price growth slowed to 12.1% in June from a record 19.2% 13 months earlier. The lender sees price growth slowing into the target band of 6% to 10% in 2018.

Since falling to a record low to the dollar on March 2, the cedi has strengthened 7% to become Africa’s best-performing currency after Mozambique’s metical and Zambia’s kwacha in the period. It strengthened 0.2% to 4.41 by 11:38 a.m.

There are signs of improvement in the economy of Ghana, the world’s biggest cocoa producer after Ivory Coast, with gross domestic product expanding 6.6% in the first quarter, the most in almost three years, as new oil fields started pumping crude.

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